Tariff Wars and Trade Deals With Costly Government
We study a simple model of tariff wars and trade deals in which government revenue collection and disbursement uses resources. The introduction of a costly government leads to lower non-cooperative tariffs, the possibility that a less costly government may win a tariff war, and fully cooperative trade deals where countries lower tariffs but do not eliminate them, even with lump-sum taxes and transfers.
|Date of creation:||2000|
|Date of revision:||08 Jun 2000|
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- Grossman, Gene & Helpman, Elhanan, 1993.
"Protection for Sale,"
CEPR Discussion Papers
827, C.E.P.R. Discussion Papers.
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- Burbidge, John B. & James A. DePater & Gordon M. Meyers & Abhijit Sengupta, 1997.
"A Coalition-Formation Approach to Equilibrium Federations and Trading Blocs,"
American Economic Review,
American Economic Association, vol. 87(5), pages 940-56, December.
- John B. Burbidge & James A. DePater & Gordon M. Myers & Abhijit Sengupta, 1996. "A Coalition-formation Approach to Equilibrium Federations and Trading Block s," Department of Economics Working Papers 1996-05, McMaster University.
- de Melo, Jaime & Montenegro, Claudio & Panagariya, Arvind, 1992. "Regional integration, old and new," Policy Research Working Paper Series 985, The World Bank.
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